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European governments have drafted a radical strategy to save the banking
system by injecting €3 trillion (£2.6 trillion) into the Continent’s economy
to cushion the banking system from a default by Greece, now seen as
inevitable.

The proposal was drawn up at a meeting of G20 finance ministers and the
International Monetary Fund in Washington and is expected to be implemented
in the next six weeks.

The fund will be used to shore up at least 16 continental banks which are
exposed to billions of pounds of Greek debt by providing access to
contingent capital reserves.